Bonderman was born to a Jewish family, in Los Angeles on November 27, 1942, and was educated there at University High School. Bonderman studied at the University of Washington, where he graduated Phi Beta Kappa in 1963, and at Harvard Law School, where he graduated magna cum laude in 1966. He was also a member of the Harvard Law Review and a Sheldon Fellow. While at or shortly after his time at Harvard, he traveled to Cairo, Egypt, to study Islamic Legal Jurisprudence and Law, and became proficient in various Islamic legal cliques developing a near-native fluency in Modern Standard Arabic. Bonderman began providing the funding for the Bonderman Travel Fellowship at the University of Washington in 1995 which gives 8 undergraduate and 6 graduate students per year with the opportunity to travel the world independently, with very little structure or regulations. In 2013, David's daughter, Samantha [Holloway] donated the funding to create a similar fellowship at the University of Michigan. While the fellowships share the same name (the Bonderman Fellowship), they vary in both eligibility and execution.

Bonderman was an assistant professor at Tulane University Law School during 1967 and 1968; he then was a special assistant to the United States Attorney General during 1968 and 1969. In 1971, he joined the law firm of Arnold & Porter in Washington, D.C., where he became a partner and specialized in corporate, securities, bankruptcy and antitrust litigation. In 1983, he joined the Robert M. Bass Group, Inc. (RMBG), which now does Business as Keystone Inc., and become the chief operating officer. Bonderman has been a principal at TPG Capital in Fort Worth, Texas, since December 1992, where he is also co-founder and chairman.

In 2002, for his 60th birthday, Bonderman had The Rolling Stones and John Mellencamp play at his birthday party at The Joint at Hard Rock Hotel and Casino in Las Vegas. John Mellencamp played for an hour, The Rolling Stones played for an hour and a half, and Comedian Robin Williams entertained guests between acts. The party cost $7 million, making it one of the most expensive private concerts ever held.

As of 2007, Bonderman was a Director of Continental Airlines, Inc., Böwe Bell & Howell Co., Ducati Motorcycles S.P.A., Credicom Asia, the National Education Corp., Beringer Wine Estates, Carr Realty Co., Virgin Cinemas, Ltd., CoStar Group, Inc., GemAlto N.V., Ryanair Holdings, Inc. and Ryanair, Ltd. He has been the chairman of Ryanair Holdings and Ryanair Limited since December 1996. He is on the boards of The Wilderness Society, the Grand Canyon Trust, the World Wildlife Fund, The University of Washington Foundation and the American Himalayan Foundation. He previously served on the boards of Washington Mutual, Inc., American Savings Bank, Denbury Resources, Inc. and Burger King Holdings, Inc. He was a board member of Uber until he resigned from that position in June 2017.

In 2008, Bonderman was named as one of the Investors of what became the T-Mobile Arena in Las Vegas.

In 2012, for his 70th birthday party, Bonderman held a private concert by former Beatle Paul McCartney at Wynn Las Vegas for 1020 guests. Robin Williams also performed a comedy routine. Bonderman donated $1000 to each guest's charity of choice.

On June 13, 2017, Bonderman resigned from the Uber board amidst controversy surrounding a sexist response to fellow board member Arianna Huffington during a company all-hands meeting. "There’s a lot of data that shows when there’s one woman on the board, it’s much more likely that there will be a second woman on the board," said Huffington. Bonderman replied, "actually, what it shows is that it's much more likely to be more talking." The Uber meeting was, among other things, slated to discuss efforts to reign in a toxic and sexist culture at the company.

In 2018, Bonderman filed an application for a National Hockey League expansion team to play at a renovated Key Arena in Seattle, Washington.